Diet passes bills enabling private postal delivery
The Diet on Wednesday enacted a set of bills to turn the Postal Services Agency into a state-run corporation and allow private firms to enter the mail delivery business.
The bills cleared the House of Councillors at a plenary session with the backing of the three ruling coalition parties — the Liberal Democratic Party (LDP), New Komeito and New Conservative Party — and some other parties.
They had cleared the House of Representatives on July 9, and with the day's passage through the upper house, they will take effect next April 1.
Commenting on the passage of the bills, Prime Minister Junichiro Koizumi told reporters, "It had been said it was unlikely to be enacted. But the bills opposed by both the ruling and other parties cleared (the Diet). I think it indicates a first big step for reform."
Koizumi has described the proposed entry of private firms into mail delivery services as "a first step in privatizing the three postal services areas" — mail delivery, postal savings and "kampo" life insurance.
Asked about future reforms of postal savings and life insurance services, Koizumi said, "It is just beginning, for it is a first step for the big reform."
One of the new laws requires the public corporation to take charge of the state-run postal services. It gives the minister of public management, home affairs, posts and telecommunications the authority to appoint the head of the public corporation.
The new postal corporation will be required to run on its own earnings without tapping into the national treasury.
Another law — which allows private firms to enter the mail delivery market — classifies postal services providers into two types: "ordinary mail delivery operators" and "special mail delivery operators," which provide services such as express mail and courier services.
But the law places strict conditions on would-be ordinary mail delivery operators, requiring them to provide the same services as the current public system.
It requires them to handle almost all types of mail nationwide at a uniform delivery charge regardless of destination, provide delivery services at least six days a week, and set up about 100,000 mailboxes throughout the country.
They also must guarantee to deliver even a single piece of mail of up to 250 grams, even if the delivery does not involve more lucrative mail such as direct mail.
The bills, when they were proposed in their original form, sparked fierce opposition from many LDP lawmakers, who feared that the legislation would force the closure of post offices in sparsely populated rural districts.
The postal service has been able to charge uniformly low rates for mail by making up for revenue shortfalls in sparsely populated areas with income in densely populated cities.
The LDP lawmakers criticized the original bills as being intended to open the way for private firms to concentrate on services in lucrative urban areas, while ignoring the less populated areas.
As a result of a compromise between the lawmakers and Koizumi, a phrase was inserted into the bills to say: "The public corporation shall set up post offices in a broad area throughout this country."
In order to maintain uniformly low rates nationwide, the lawmakers persuaded Koizumi to soften a legal requirement that the new public corporation deposit part of its earnings into the national treasury.
No companies have expressed willingness to enter the ordinary mail delivery service field.
Yamato Transport Co., which had initially expressed interest in providing such services, changed its mind after the details of the new legislation became public.
Yamato condemned the bills for placing "harsh conditions" on new entrants.
"It is impossible for the time being for us to expect competition to spring up between the new postal public corporation and private companies," a spokesman for a parcel delivery company said.
